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Australian Manufacturers And Wholesale Distributors Lag Behind In Ecommerce Adoption

SYDNEY, Oct. 29, 2013 /PRNewswire/ -- Research sponsored by NetSuite Inc. (NYSE: N), the industry's leading provider of
cloud-based financials /
ERP and
omnichannel commerce software suites, has revealed that the Australian
manufacturing and wholesale distribution sectors are lagging behind in
Ecommerce adoption, with only 10 percent of companies currently able to receive orders directly over the Internet. Despite strong optimism about their prospects for growing the Ecommerce channel, with almost 75 percent of businesses viewing it as an opportunity, the study conducted by Frost & Sullivan has indicated just how unprepared they are to handle this growth.

"For manufacturing and wholesale businesses, Ecommerce is both an opportunity and a challenge," said
Mark Dougan, managing director for
Australia and
New Zealand for Frost & Sullivan. "It offers a way to build closer and more direct relationships with the end customer, the ultimate consumers of their products, but also presents both strategic and operational challenges. The strategic challenge largely lies in the risk of bypassing long-established distribution channels. Our research identified that the main operational challenge is in linking the Ecommerce front-end to existing internal business systems."

The sponsored survey of 102 Australian businesses in the manufacturing and wholesale distribution sectors was carried out by Frost & Sullivan in
September 2013, to understand the importance of the Internet as a channel for their future business success. It revealed that businesses in these sectors see the opportunities and benefits that Ecommerce can offer, particularly convenience for customers, reduction in distribution costs and linking customer orders directly with central business systems. While 76 percent of respondents envisage that customers will increase online ordering over the next few years, ordering direct from their websites is much less common than in the retail sector, with most currently only receiving orders via e-mail. Businesses still identify a number of challenges that are keeping them from adopting Ecommerce, including losing direct relationships with B2B customers, system integration issues and the feeling that they need to offer lower prices online.

According to Frost & Sullivan, while only a small percentage of B2C consumers are able to order directly from wholesalers and manufacturers online, more than 50 percent of Australian manufacturing and wholesale businesses now place orders directly with suppliers online. Over three-quarters of businesses expect to increase their online ordering from suppliers, citing quicker and easier ordering processes, access to a wider range of suppliers, less paperwork involved and lower prices than other channels as the top reasons.